POL 333 Journal 11

POL 333 Journal 11 - This article shows that there is great...

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Financial Times Lisbon shapes austerity budget Parliament backs broad proposals Borrowing costs jump sharply November 4, 2010 This article talks about how the Portuguese government has approved a budget that has  some major budget cuts in it.  They did this in an attempt to stabilize their markets, which by  many see them as needing financial assistance from the European Union in the fairly near future.  Portugal thinks and says they do not and will not need financial help from others and that they  can take care of all their business on their own.  As a result of this fear the other European  nations have about Portugal possibly needing assistance has made the cost of borrowing money  much higher than what it was previously.  This in itself is making it harder for the Portuguese  government to cut spending.
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Unformatted text preview: This article shows that there is great tension in Europe over financial matters. With Greece and Ireland already receiving bailout money, many are afraid that Portugal and Spain will be next in line to receive the assistance. This in turn causes prices to rise and when the governments try to make cuts they have to spend more just from borrowing the money. This shows a flaw that the common economy and currency of Europe is causing. Some of the nations that took the Euro were not ready as is clearly seen with these massive bailouts. This leads to the question is there enough money in the European Central Bank to provide these bailouts to these countries? Or are some of the countries that took the euro going to switch back to their old monetary system?...
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